Thursday, December 02, 2010

Technical Picture - Stocks Surge on Positive Data

The bulls were encouraged by favorable data out of China overnight and the best ADP report on private sector job creation in three years. Equities gapped higher on the open and rallied into midday breaking through the two week bearish flag top to end the session well above the 1200 psych level. Volume lagged so the new uptrend is unconfirmed. What a difference a day makes!

The rally was broad based with all major sectors participating. The leaders were coal, housing and steel... Tomorrow's economic data includes jobless claims as a lead in to Friday's all important employment report.

Click on chart to enlarge

RIMM stalled and reversed after filling the May 19th gap as depicted on the daily chart above. Volume was above average but less than yesterday, so it's too soon to tell if this is distribution. Keep a close eye on it tomorrow as the 15 minute timeframe looks like it has carved out the left side of a H&S top.

It's always valuable to have someone else's stock screener do the stock picking for you. This can either confirm your own picks and/or add to your trading list. HCPG is certainly more adept at finding oil & gas names than I am.

Last week for example, I was very bearish at the front end of the week, but they were bullish on oil stocks. Wednesday I inspired myself from their strategy for oil swings which led to nice profits which I would otherwise have missed. Also traded some of their picks in the daytrading account as well.

I review their picks on the 15 minute timeframe before setting up the buy/sell orders in my brokerage account. I don't trade all or even half of their picks, because they don't all meet my criteria. They have about four different trading strategies and I prefer their flagship BO long, if that's any help.